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A Rupee Gold Sell Off ?
Dec 19 ( From FRED, World Gold Counci, Signal Financial Groups)
With capital outflows, wide current account
deficit and high consumer price inflation the Reserve
Bank of India kept the repo rate unchanged in the mid-quarter
review of the monetary policy, 2013-14
subsequently, in order to restore stability in the forex
market, the Reserve Bank has taken several measures
since mid-July 2013, which, including restrictions
on gold import.
That small step took by the Reserve Bank of India was in fact had huge implication for gold prices in the weeks ahead...
The consumer market for gold was once again dominated by global leaders India and China, which together accounted for almost 60% of the global jewellery sector and around half of total bar and coin demand. On a year-to-date basis, total consumer demand (for jewellery, bars and coins) in each country is almost 50% ahead of the same period in 2012.
Till came that new restriction from the RBI and brang the total disconnect as shown by the chart below... And Gold Prices Plummeted...
Rupee/USD * Gold prices ( Left Scale / Blue Line )
Gold prices ( Right Scale / Red Line )
Gold Seasonals Does Not Help
And as you can see on the chart below, seasonality on the gold market point to weaker prices from the third week of November til the third of December.
What About Technicals ?
Gold prices are in a downtrend channel that started on August 28 but reversed on November 13 as shown by the chart below...
Fibonacci support is at 1203 and next resistance at 1221. For me, only a daily close above the 1239 level will be the first sign of a reversal for target at 1248 and 1258, unless 1203 broken, then correction to 1181 and 1168...
A Rupee Gold Sell Off ? $MACRO, $STUDY, $GLD, $GC_F
We did not have the signal for a rebound in gold prices yet: need a daily close above the 1239 to confirm...